Market Update – Risk-off Monday

Markets experienced a sell-off on Monday as Fed tightening sentiments peaked after Friday’s US jobs data. The US dollar rallied as the focus shifted toward the US CPI data on Wednesday. The positive Chinese inflation data released over the weekend renewed inflation fears amid a resurgence of Covid 19 cases in Shanghai. Eurozone inflation data will also be released on Wednesday.

AUDUSD dropped by -1.01% as the dollar extended gains after Friday’s better-than-expected US Non-Farm employment data. The NFP rose from 268K surveyed to 372K in June reinforcing Fed’s aggressive tightening sentiments. The pair slipped from the 0.68500 resistance level as bears target 0.6760, 2-year support. FOMC member Williams will be speaking today in the New York session.

EURCAD plunged by -0.30% on Monday as Euro continues to battle stagflation winds. The Eurozone continues to battle skyrocketing inflation and investors will be paying close attention to the French and Spanish CPI on Wednesday.

More so, the cutting on the Nord Stream pipeline for 10-days for maintenance could weigh down Euro economic outlook in the near term. A break below 1.3120 could renew selling interests towards 1.3040, a 9-year low. German Buba President Nagel will be speaking later in the New York session.

European stocks slumped on Monday following better-than-expected US job data, triggering inflation worries. The FTSE100 edged lower by -0.36% despite bouncing off a 7100 near-term support. The index faces a critical resistance at a 7200 psychological level. A break below 7100 could open the way for the 7000 support.

DAX lost by -0.71% as European gas falls underpinning bulls below the 13000 psychological barrier. A 13200 level could interest buyers if bulls manage to break above that level, and 12800 would be key to holding the bullish outlook in the near term. CAC40 shaded off -0.52% to 5906 and bulls may attempt a break above the 6000 psychological resistance.

US equity futures slide early Monday weighed by Tech stocks slump. S&P500 futures lost by -0.57% as bulls shy away from the 3900 psychological resistance. A failure to break above that high could cause a price retracement towards the 3800-support level. Upside gains could target the 3950 if resistance fails to hold.

Nasdaq100 drooped by -0.69% with Twitter weighing down the index as Elon Musk drops bid. Gains are capped by the 12200 level and 12800 could be the next critical level to watch out for if resistance is breached. Near-term support is at the 11600 level. DJIA Index plunged by -0.62% with 31500 mid-figure limiting upside gains. The near-term support is at the 31100 level and 32000 is possible if near-term resistance is breached.

Commodity markets plunged on Monday as Chinese Covid 19 cases resurge reviving lockdown fears. USWTI futures dropped by-2.30% from last week’s high at $105.00/barrel. Bears may target the 97.00 level in the near term.

Brent oil futures also lost -1.78% from the 107.00 resistance and critical support is at the 99.00 level. A possible shut down of Nord stream for maintenance could cause a tighter energy market for the next 10-days and oil could recover losses.